see previous mailer<\/a>).<\/p>\nIt would be wrong to say either journey went smoothly.\u00a0 Traffic jams and road closures in both directions meant my blood was boiling for more reasons than the heat!<\/p>\n
However, I did learn something which may be useful to you one day.\u00a0 If you are stationary on the motorway waiting for a jam to clear, turn off the engine and open all the doors.\u00a0 The draft created by the cars speeding down the other side of the motorway is very cooling (and free!).<\/p>\n
How did I know to do this?\u00a0 The marvellous Hannah Fry did a post on social media the other day. She explained that you can quickly cool a hot car by opening the opposing windows (driver front\/ passenger rear or vice versa), creating a draft and quickly bringing the steering wheel down to a tolerable temperature. I just adapted what I had learnt on the M4 yesterday afternoon!<\/p>\n
But what on earth has this got to do with valuations?<\/p>\n
Firstly, it made apparent the issue of relative value. As I sat on the M4, I pondered whether this method of amateur air conditioning would be as valuable in the dry heat of the Sahara, or whether in that scenario if I might prefer a state-of-the-art air conditioning system? (I settled on the latter pretty quickly even though it would cost more).<\/p>\n
It also demonstrates how quickly and effectively who owns value can be changed<\/p>\n
Hannah Fry\u2019s idea was great, and very valuable to me, yes. But, once I had found another use for it, are we not now sharing its intrinsic value?<\/p>\n
Could Hannah Fry have patented the idea? Or, more importantly, protected the idea if patented? No.\u00a0 So the value is somewhat dissipated, surely.<\/p>\n
Could the right engineer take the laws of physics and the design of a car to create a new type of non-energy absorbing air conditioning system which might become valuable one day? Yes.<\/p>\n
Could that solution be patented? Possibly.<\/p>\n
Could it be worth millions? Maybe.<\/p>\n
Is there a remote chance that an industry class of \u201cnatural\u201d air conditioning could emerge just as solar and windfarms have emerged from centuries old approaches to making energy?\u00a0 Sounds fanciful doesn\u2019t it, but would the original readers of Frankenstein have believed that robots could play football?<\/p>\n
Cutting to the chase, how would I value my new natural air conditioning units for cars and buildings?<\/p>\n
Well, clearly there would be the cost of inventing, designing, building and testing my great solution.\u00a0 Adding up my R&D Tax Credit claims could provide a starting point.<\/p>\n
I might have to invest in researching the history and designs of buildings in hot climates to see what I could learn.\u00a0 I could value the time I spend on this and possibly my travel costs.\u00a0 It might also be helpful to understand the effort a competitor would have to undertake to compete with my new designs.<\/p>\n
I could look at the market size and opportunity in cars and buildings and use TAM, SAM and SOM to estimate unit sales and price per unit. This would make forecasts possible.\u00a0 Sensitivity analysis could help me set the value of the future opportunity today, possibly utilising a Monte Carlo simulation methodology.<\/p>\n
If I was able to get a patent approved, there are marketplaces which will help me understand what that is worth.\u00a0 Better still a family of patents might make the value of the opportunity grow larger still.<\/p>\n
Then there\u2019s determining the value of the opportunity cost for those people currently installing air conditioning units in vehicles and buildings.\u00a0 My solution will be cheaper, more sustainable and cost less to run. But will it be worth more or less than the nearest \u201cstate of the art\u201d?\u00a0 I would like to think more, but market factors and competition may make it difficult to get a premium price.<\/p>\n
I am almost tempted to jump off my laptop straight into a lab to design my new aircon unit, but I pause. The truth is I love valuing assets more than creating and building them.<\/p>\n
So now, back in the cool environment of my office, all I can say is:<\/p>\n
You know we are always up for valuation projects of all shapes and sizes. Call or email us anytime and we will do everything we can to help.<\/p>\n","protected":false},"excerpt":{"rendered":"
Quantifying the value of a clever person probably involves using substitution or surrogates.<\/p>\n","protected":false},"author":2,"featured_media":604,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-595","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts\/595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/comments?post=595"}],"version-history":[{"count":1,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts\/595\/revisions"}],"predecessor-version":[{"id":596,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts\/595\/revisions\/596"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/media\/604"}],"wp:attachment":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/media?parent=595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/categories?post=595"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/tags?post=595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}